Cyber insurance demand rises in APAC's emerging markets

APAC cyber insurance market is growing at nearly 50% annually.

Asia Pacific (APAC) has seen a significant rise in demand for cyber insurance as rapid digital transformation, there is considerable potential for further expansion in markets like Thailand, Malaysia, Vietnam, Indonesia, and the Philippines, which are seen as key areas for growth, according to Gallagher Re. 

The APAC cyber insurance market is growing at nearly 50% annually, accounting for 7% of the global market as of 1 January 2024. 

Despite this growth, market penetration remains low compared to other regions. 

In 2022, cyber insurance premiums in the US were valued at 0.0353% of GDP, whereas in APAC, the average was only 0.0025%, about 14 times lower.

Even larger economies such as China and India have room to increase their cyber insurance penetration rates. 

Regulatory developments are expected to drive future demand, with countries like Singapore and China implementing stringent data protection laws that require companies to maintain adequate cyber insurance coverage.

Opportunities for growth also exist in sectors that have yet to be fully tapped, including small and medium enterprises (SMEs) and individual coverage. However, challenges remain in APAC’s cyber insurance market. 

These include the lack of standardised policy terms and coverage, difficulties in underwriting and assessing risk in a rapidly evolving cyber threat environment, and the limited availability of historical claims data, given the market's relatively recent emergence.